To Find Her Optimal Consumption Bundle,Vanessa Would Have To

question 130

Multiple Choice

To find her optimal consumption bundle,Vanessa would have to:

• A)calculate the numerical value of the utility she receives from each specific consumption bundle.
• B)rank-order consumption bundles based on the level of utility she receives from each one.
• C)calculate her budget for each consumption bundle and identify the substitution and income effects of each bundle.
• D)choose her bundles in an irrational manner.

---

Definitions:

Future Value

Future worth of cash or an asset that is akin in value to a nominated sum in the present.

Annually

Pertaining to events or actions that occur once every year.

Present Value

The present worth of a future sum of money or sequence of cash payments, reduced at a particular rate of interest.

PV

An abbreviation for present value, referring to the value today of a future payment or series of payments, adjusted for a specific rate of return.